Salazar v. McDonald's Corp., No. 17-15673 (9th Cir. 2019)
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McDonald's employees filed a class action alleging that they were denied overtime premiums, meal and rest breaks, and other benefits in violation of the California Labor Code. Plaintiff class members worked at franchises in the Bay Area operated by the Haynes Family Limited Partnership.
The Ninth Circuit affirmed the district court's grant of summary judgment to McDonald's, holding that there was no evidence that McDonald's, as the franchisor, was a joint employer. The panel held that the district court properly determined that McDonald's was not an employer under the "control" definition, which requires control over the wages, hours, or working conditions. The panel also held that the district court correctly concluded that McDonald's did not meet the "suffer or permit" definition of employer. Finally, the panel held that the district court correctly concluded that McDonald's was not an employer under the common law definition of "employer." Furthermore, the panel held that McDonald's could not be held liable under an ostensible-agency theory; plaintiffs met neither the damages nor the duty elements to prove negligence; and the panel declined to address the merits of the remaining claims.
Court Description: California Employment Law. The panel affirmed the district court’s summary judgment in favor of McDonald’s Corp. in a class action brought by McDonald’s employees alleging that they were denied overtime premiums, meal and rest breaks, and other benefits in violation of the California Labor Code. The plaintiff class members worked at McDonald’s franchises in the Bay Area operated by the Haynes Family Limited Partnership. The panel held that the district court properly ruled that McDonald’s was not an employer under the “control” definition, which requires “control over the wages, hours, or working conditions.” Martinez v. Combs, 231 P.3d 259, 277 (Cal. 2010). The panel also held that the district court correctly concluded that McDonald’s did not meet the “suffer SALAZAR V. MCDONALD’S CORP. 3 or permit” definition of employer. The panel held that under California common law, McDonald’s cannot be classified as an employer of its franchisees’ workers. The panel concluded that although there was arguably evidence suggesting that McDonald’s was aware that Haynes was violating California’s wage-and-hour laws with respect to Haynes’ employees, there was no evidence that McDonald’s had the requisite level of control over plaintiffs’ employment to render it a joint employer under applicable California precedents. The panel held that McDonald’s cannot be held liable for wage-and-hour violations under an ostensible-agency theory. The panel rejected plaintiffs’ claim that McDonald’s owed them a duty of care, which it breached by supervising Haynes’ managers inadequately and failing to prevent the alleged hour-and-wage violations. The panel held that plaintiffs met neither the damages nor the duty elements required to prove negligence. The panel did not consider plaintiffs’ arguments on the merits of the district court’s rulings striking plaintiffs’ representative Private Attorney General Act claims, and denying class certification. Chief Judge Thomas concurred in part and dissented in part. Chief Judge Thomas agreed with the majority that there was no genuine issue of material fact regarding whether McDonald’s was an employer under the “control” or common law definitions. Dissenting, Chief Judge Thomas would hold 4 SALAZAR V. MCDONALD’S CORP. that there were genuine issues of material fact regarding whether McDonald’s was a joint employer of franchise location workers under the “suffer or permit” definition.
The court issued a subsequent related opinion or order on December 11, 2019.
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